Tim Cook's Compensation Should Alarm Investors: Firm

Apple shareholders are urged to raise a stink about a $99 million pay package awarded last year to CEO Tim Cook, who's already reportedly worth more than $1 billion. In a letter to shareholders published Wednesday, proxy advisory firm Institutional Shareholder Services said there are "significant concerns" about the "design and magnitude" of the package, which is worth 1,447 times the wage of an average Apple employee, per the BBC. Cook received $98.7 million in total. According to Reuters, that included $3 million in salary, $82 million in stock awards, a $12 million cash bonus for hitting Apple's targets, and "$1.4 million for air travel, 401(k) plan, insurance premiums, and others."

In comparison, Microsoft CEO Satya Nadella received $49.9 million in compensation in 2021, per TheStreet. However, Apple's board previously noted revenues and profits "significantly exceeded" company targets in 2021, which marked Cook's 10th anniversary at the helm, per the Financial Times. Shares have risen 1,000%, from $13.34 when Cook took over in August 2011 to $172.55 as of Wednesday. The increase from Cook's 2020 remuneration of $14.8 million coincided with a nearly 30% increase in share prices in the last year. His cash bonus came as Apple's total shareholder return reached 192% in the three years ending August 2021, per the Times, which notes Cook sold $752 million in shares that same month.

Yet ISS points out that half of Cook's equity award "lacks performance criteria," per the BBC. The firm adds Cook's perks—including $630,630 in personal security costs and $712,488 for personal use of a private jet—"significantly exceeded" those from comparable companies. ISS is now urging shareholders to vote against the pay package at the company's annual shareholders meeting in the first week of March. However, Apple's board is ultimately in charge of pay packages, as shareholder votes are "only advisory," per the BBC. Though "a record number of S&P 500 companies last year failed to garner 50% support for a pay vote at annual meetings," some 95% of Apple shareholders backed the pay, per the Times. (More Tim Cook stories.)